Erie Administrator Felt ‘Violated’ After Town Was Targeted In $1M Scam

ERIE, Colo. (CBS4) – Police and insurance providers are investigating whether or not the Town of Erie will be reimbursed more than $1 million, after an employee mistakenly rerouted the money to a scammer. Town Administrator Malcolm Fleming told CBS4’s Dillon Thomas the town is hoping their $2 million “crime policy” will cover the significant clerical mistake.

Erie Parkway Bridge (credit: CBS)

“It is really frustrating to constantly have to be on your guard,” Fleming said.

Fleming said the town lost more than $1 million, after a scammer filled out an online form requesting payments for the Erie Parkway Bridge be rerouted to a different online account. An employee told Fleming they believed the letterhead, address and other items on the request were enough to believe the request was legitimate.

Erie Town Administrator Malcolm Fleming (credit: CBS)

“(The employee) verified the address information. They assumed that it was a right change,” Fleming said.

The bridge, which cost the town more than $5 million to complete, was still being paid off through SEMA Construction Inc. The employee routed the money to the scammer’s account without realizing the request did not come from SEMA.

Two weeks later, the bank called the town to warn them of potential fraud.

“They had suspicion of fraudulent activity,” Fleming said. “We asked (SEMA) if they had received the payment we had made almost two weeks earlier. And, they said they had not.”

“This wasn’t $10,000, this was over $1 million,” Thomas said.

Erie Parkway Bridge (credit: CBS)

“Yes, over $1 million. That is a significant amount. It is about a $5 million project. So, about 20 percent of that that is huge for the town,” Fleming responded.

Fleming said the town has stopped previous scamming attempts, and likely receives similar phishing scam emails every day.

“This one, unfortunately, got through our defenses,” Fleming said. “A legitimate payment we were making to the contractor went to the wrong people.”

“What was your reaction?” Thomas asked.

“I felt violated,” Fleming admitted. “The criminal element is out there, and we always need to be on our guard.”